My understanding, and I am not an accountant, is that CCA can only be used to reduce your rental income to 0. It can not be used to create or increase a loss. Is this not correct? Or are you saying that in theory you could carry forward your loss (meaning you wouldn't actually have a loss in that year) and then use the CCA?

You're correct - I was mistaken. There are actually different rules for business income and rental property income. CCA cannot be claimed if it will reduce rental property income below zero.

Just another reason to find an accountant who deals with this on a regular basis.

Claiming CCA could cost you if it is claimed while you are in lower tax bracket and repaid at a higher one. ie. if you sell and have a large capital gain that pushes you into a higher bracket, you'll end up paying at a higher rate than you did when claiming CCA. You'll pay more tax than you saved.

With the price of real estate rising the way it is this is a real possibility. If you don't believe this is your situation then claim CCA.